TheCorporateCounsel.net Blog |
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Friday, January 16, 2004
Our New "Corporate Governance Website" Portal! Under the new NYSE listing standards, prior to their 2004 annual shareholder meetings, listed companies must create a corporate governance page on their websites. The bare minimum for compliance is a page that contains links to the company's governance guidelines, code of conduct, and the charters of the key board committees. The next tier of compliance is to include additional information (egs. list of directors, committee assignments), corporate documents (egs. articles, bylaws, policies). Top tier companies also include instructions for submitting accounting and whistleblowing complaints. Thanks to Michael Goldblatt, we have posted a new "Corporate Governance Websites" Portal, which has links to various governance webpages that comply with some or all of the new NYSE requirements already. Thursday, January 15, 2004
New Pension Plan Disclosures Now Required In late December, the FASB issued a revised FAS 132 regarding employers’ disclosure about pensions and other postretirement benefit plans. The new standard requires that companies provide the public with more details about their plan assets, benefit obligations, cash flows, benefit costs and other relevant information. This disclosure now is required in quarterly and annual financial statements - since the new guidance is effective for fiscal periods after December 15, 2003, companies will need to comply in their next quarterly and annual report. For the first time, companies are required to give a breakdown of plan assets by category, such as equity, debt and real estate. A description of investment policies and strategies and target allocation percentages - or target ranges - for these asset categories also are required in financial statements. The new FAS doesn’t change required disclosures about defined contribution or multi-employer plans. The FASB has advised that when prior periods are presented for comparability purposes, those periods should be restated to comply with the new guidance. The FASB also acknowledges, however, that it’s not always practical to obtain the prior period information; but in that situation, a company should disclose in its financial statement footnotes all information that is available and describe the information that was excluded. SEC Issues Guide for Investors on Executive Compensation The SEC has posted a brochure for investors designed to help them locate compensation information in company reports, including types of compensation and what is filed with the SEC, and where to locate information about executive pay (e.g. proxy statements, 10-Ks). More on Preparing Executive Compensation Tables In Broc's interview with Alan Kailer on Preparing the Executive Compensation Tables, the complexities of preparing the compensation tables for the proxy statement are explored. In addition to this useful interview, in the "Proxy Season Resource Center," we have posted an updated memo on this topic from Alan with contains more extensive analysis – with excellent charts - on how to prepare the executive compensation tables. Posted by Kimberley Drexler Wednesday, January 14, 2004
Disclosure of Internal Control Deficiencies Grow Even though the SEC already has delayed the effective date once, my money is that the SEC will again delay the effective date of the Section 404 internal control reports. Right now, "accelerated filers" are required to file their first report for fiscal years ending after June 15, 2004 (all others can wait until their fiscal years end after April 15, 2005). Since the PCAOB still has not acted on its proposal to set attestation standards, "something's has gotta give" as Jack Nicholson would say. [personal note - due to a receding hairline, back in college days I would pretend that my name was "Pat Nicholson" and Jack was my uncle - no girls bit that I can recall.] Not surprisingly, the number of companies that are disclosing that they have deficiencies in their internal controls has slowly grown. In fact, there have been rumblings that the SEC would be disappointed if there failed to be a significant number of these disclosures. We have updated our list of sample disclosures in this area at Internal Controls - Deficiencies and Weaknesses Identified in the "Disclosure Analysis and Samples" Practice Area. Tuesday, January 13, 2004
Reminder about Tomorrow's Section 16 Webcast Don't forget tomorrow's special webcast - "Alan Dye on the Latest Section 16 Developments" - for members of the NASPP and Section16.net. You can ask questions and learn the latest Section 16 practice tips from Alan Dye! An audio archive and transcript will be posted following the live webcast. The non-member fee for this special webcast is $495. If you wish to access this important program, you may simply take advantage of a no-risk trial to Section16.net or the NASPP. If you have not renewed your Section16.net or NASPP membership for 2004, you will not be able to access the webcast - scroll down to yesterday's blog for info about how to renew right away! ISS Releases Updated Voting Policies As Pat McGurn predicted in our October webcast - "The Wildest Proxy Season Ever: Forecast for 2004" – ISS has amended its voting guidelines for this year. This update includes many significant changes, the most drastic of which will affect stock-based incentive plans. The new policies are effective for shareholder meetings held on – and after - February 1, 2004. More details about ISS’ updated policies are provided in an interview with Pat McGurn on Changes in ISS’s 2004 Voting Guidelines – as well as in two extensive memos from ISS posted in our “Proxy Season Resource Center” (they are also linked from Pat's interview). Monday, January 12, 2004
Proper Use of Boilerplate We have launched an exciting new monthly feature - "Carl's Corner"! This feature is written by well known lawyer, Carl Schneider who is Of Counsel and former Chairman of Wolf, Block, Schorr and Solis-Cohen's Corporate Law Department in Philadelphia. Carl's first feature is about how to use - and not use - boilerplate in corporate agreements. Carl has a unique way of conveying practical guidance on matters that many of us take as a "given" without pausing to reflect - so check this "Corner" out! [If you are seeking the PLI Notes that formerly resided where "Carl's Corner" now sits, they are in our "Notes from Conferences" section of "Sarbanes-Oxley Law Firm Memos.] Ill Will on the 6th Floor? Last Wednesday, SEC Commissioner Roel Campos issued a dissent to the SEC's enforcement settlement regarding the Heartland Group. It is extremely rare for a Commissioner to issue a dissent in an enforcement action (much more common to do so regarding a rulemaking, albeit even that is quite rare). As I blogged about back on December 14th, the SEC took the unsual action to go after the independent directors of this mutual fund in this settlement. Campos believes the Commission was too lenient with the Heartlands independent directors and more meaningful sanctions should have been levied against the directors. Add this dissent to the well-publicized split over shareholder access (Donaldson, Campos and Goldschmid are "for"; Atkins and Glassman are "against") and you can easily envision a not-so-peaceful co-existence on the 6th floor of 450 5th St. these days (all of the Commissioners have their offices on the 6th fl. of the SEC's HQ). By the way, it appears that a SEC roundtable on shareholder access will be held sometime in late January/early February. Grace Period Over! If you have not renewed your subscription to either TheCorporateCounsel.net or Section16.net, please be aware that you won't have access to the sites starting today. For Section16.net members, this means you won't have access to the upcoming webcast - "Alan Dye on the Latest Section 16 Developments" - next Wednesday. For TheCorporateCounsel.net members, you wouldn't have access to the "50 Nuggets in 50 Minutes II" webcast on the 21st. |
